In America GDP Should = C + g + I

Denver area journalist David Harsanyi deserves a double screwdriver. He’s watched far more of this week’s mile high kabuki dance than anyone with an abundance of cabal TV channels and a normal life should logically have to stomach. Not only that, he’s actually paid attention. To go one further, he’s read between the lines.

As Olbermann and Mathews of MSDNC compete in their petty schoolboy jealousy to reprise the role of Emperor Tiberius’ minnows on behalf of Senator Barack Obama. James Carville of the Clinton News Network reminds me once more of what Forrest Gump would have been like if he’d grown up to hate mankind. Me, I was too busy hoping Bill Clinton would make like Chucky from the Child’s Play movies and do the choppy-choppy thing to Senator Obama’s convention bounce.

Harsanyi, on the other hand, actually endured the mental torture of figuring out what on Earth the Democratic Party just spent three days discussing at The Pepsi Center. He figured out that the modern Democratic Party represents a failed experiment in horticulture.

If you take the petty jealousy of class warfare and cross-breed in the stale, morally dead noblesse oblige socialism of the Berkley Faculty Lounge, it gives you a leafy green blossom that makes a skunk cabbage smell sweet by comparison. Harsanyi describes the Democratic platform in Denver as the end of capitalism.

Harsanyi begins with an insight that surprises me. I was actually relieved to hear Governor Schweitzer of Montana would speak in Denver. I figured a willingness on Senator Obama’s part to let one of the less toxic Democratic public officials speak this convention implied a certain probability he would actually listen to at least one voice of reason.

Perhaps my naïve optimism was in ghastly error. Harsanyi offers us insight into Schweitzer’s claim that we must invest.

When Schweitzer claims “we must invest” in projects he likes, he means government will take it and invest it for you.

You see, you must.

This brings me back to a conceit that buttresses my desire to see Barack Obama defeated this election season. Goods and services can be procured and distributed by one of two means. We can trade them or we can forcibly seize them.

When Governor Schweitzer says you must invest, he does not merely mean this as a philosophical plea to reason. The IRS never offers you a prospectus that explains the risks and rewards of having a certain portion of your salary withheld every pay period. The Good Governor isn’t talking about enrolling us in a big, happy national TSP.

Secure in his belief that the truth is a malleable composite, Governor Schweitzer then inveighs. Here is the obligatory partisan attack, according to Harsanyi.

Then Schweitzer claimed (in a half-truth) that Republican nominee John McCain voted “against” solar energy, biofuels and wind energy.

Which is weird because I could swear my neighbor has solar panels, so they must be legal. I’ve seen windmills. So I suppose that Schweitzer meant that McCain voted against some federal boondoggle for wind and/or solar energy.

Schweitzer doesn’t grate specifically because he attacked John McCain. He grates because of the fundamental violence that he does to economic reality. If I choose to spend my lunch hour reprising the old elementary school science project of attempting to cook my hot dog with a sheet of tin foil and the hot, noonday sun, Senator McCain will not have a Vietnam flashback and attempt to take me out with an air-to-ground missile.

Show me an application of solar electricity that offers sufficient return on capital investment and a low level of downside risk, and I may just toss in a few sawbucks to join you for the ride. Any architect who intentionally designs a building to maximize the solar loading from properly tinted windows is using solar energy to minimize that building’s reliance on fossil fuels. I doubt anyone would have carted F. Buckminster Fuller off to the reedumacayshun camp for suggesting such a thing.

Alas and alack I was right. Governor Schweitzer really is one of the more reasonable Democrats, when the issue de jour is economics. Harsanyi takes us to the Sraffian Twilight Zone, as he listens to Senator Hillary Rodham Clinton stick it to The Man, not named Bill.

Sen. Hillary Clinton later chimed in that she would force energy companies to invest in the projects deemed worthy of the common good. (Imagine if your business were told how it “must” invest its money.) She claimed Americans “give” windfall profits to oil companies. No, we don’t “give” them anything; we pay them for a product.

Hillary Rodham Clinton views the social contract between our government and the producers of wealth the way General Sherman and General Custer once viewed treaties between Native American tribes and the US Government. They will produce what we need like the slaves and drudges they are, and in return we’ll do them a favor. They can actually keep something. But not too much; that wouldn’t be fair to the little guy


George Will eviscerates the populist idiocy directed by the Democratic Party against the assumed iniquities perpetrated by Big Oil.

Exxon Mobil does make $1,400 a second in profits — hear the sharp intakes of breath from liberals with pursed lips — but pays $4,000 a second in taxes and $15,000 a second in operating costs.

Doing some back-of-the-envelope ORSA math, I get Exxon taking in $20,400 per sec and only getting a 5.something percent margin of profit. In the absence of a corporate income tax, they take home $5,400 per second; which would move their margin of profit a smidgen north of 25%.

This means Hillary, Barack and the rest of Robin Hood’s Merry Band already take in the vacinity of 80% of Exxon’s profits. The Sisterhood of The Travelling Pantsuits wants still more. The jawbone of a hen only contains so many teeth.

It’s enough to make our corporations turn Benedict Arnold and leave once and for all. The populists won’t have that either. Reacting in a logical fashion to the disincentives makes these plutocratic greed-bags still more culpable in the eyes of the populist partisans. Those who still believe, as Democratic candidate William Jennings Bryan once did, “You shall not crucify mankind upon a cross of gold.”

David Harsanyi does America a great service. Not just by watching this bogus infomercial so that the rest of us don’t have to. His wind-up paragraphs capture and distill the essence of why modern American Liberals are wrong in their prescriptions for economic growth and vitality.

“we” — whether you want to be a part of “we” or not is irrelevant — can save the world. We can create jobs. Create new energy. We can guarantee fair wages. Health care. Child care.

Well, we can. But we could do it a lot better without Washington.

When economists calculate the GDP of an economy they use the formula GDP = C + G + I. Here “C” is consumer spending, “G” is government investment, and “I” is the capital investment from business. Where Harsanyi is correct and Barack Obama is wrong is that GDP really should be calculated as follows. GDP = C + g + I.

Our nation’s last Democratic President got one thing right in a prior year’s State of The Union Address. The Era of Big Government should be over.

UPDATE: I did warn you those were b-o-t-e calculations. I re-read it, saw something fishy, and realized the warlords of Planet Exxon kept 6.8% of their revenue/sec…

Cross-Posted At:The Mighty TMR